Australian Property

Viewing posts in the Australian Property category

Apartments drive dwelling approvals up in August

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of August. At the national level, the number of dwelling approvals rose by a seasonally adjusted 3.0% to 16,810. The overall increase was led by units & apartments, rose by 9.6%, whereas house approvals fell by 1.8%. The result beat analysts’ expectations, who had expected a 1% rise in approvals over the month. In the year to August 2014, dwelling approvals rose by a seasonally-adjusted 14.5%, with house approvals up by 12.2% and unit approvals up by 17.5%: A chart...
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RBA: demand-side stimulus can’t fix housing affordability

ScreenHunter_92 Oct. 02 09.56 The Reserve Bank has this morning appeared before the parliamentary inquiry into housing affordability, and hosed-down demand-side measures aimed at improving housing affordability, noting that with Australia's constipated supply system, measures that add to demand will simply be capitalised into higher prices: ...housing prices and affordability are affected by the interaction of both supply and demand factors. The factors that I have mentioned so far, such as household incomes and the cost and availability of finance, primarily affect the demand side of the market. In the short to medium term,...
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Stock on market fell sharply in September

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen SQM Research has just released its stock on market figures for September, which revealed an unusual 2.4% decline in for sale listings over the month, with listing levels also down 1.1% over the year: As shown above, Sydney has led the charge, with listings there down a massive 6.9% in September and by 10.2% over the year. By contrast, listings in Darwin were up 0.2% over the month and by 25.4% over the year. According to SQM managing director, Louis Christopher: “The falls recorded in September are abnormal as listings normally rise at the start of spring. It...
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The pros and cons of foreign property investment

ScreenHunter_06 May. 06 09.27 By Leith van Onselen The chief of one of China's largest developers, Country Garden's Johnson Zhang, has played down concerns that Chinese investment into Australian housing is driving-up home prices and shutting-out locals, instead arguing that there is plenty of second hand stock available for locals. From The AFR: “I feel this debate has errors,” he said. “Remember, foreign investors including Asians can only buy new properties. There is a huge second-hand market with enough housing there for locals”... “We just don’t think there should be a fear of foreigners coming to...
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Governments must work together to solve housing supply

ScreenHunter_18 Jul. 05 10.22 Cross-posted from The Conversation: Is there a national housing supply problem? No, but there is a problem of access to affordable housing in certain regions. Last month, Reserve Bank Governor, Glenn Stevens commented on the need for “animal spirits” to respond to the exceptionally accommodative monetary policy setting and boost the supply of housing. More than 12 months have passed since the RBA last adjusted the cash rate to the current record low of 2.5%. This has stimulated investor demand, particularly in metropolitan Sydney and (to a lesser extent) Melbourne. Yesterday’s Reserve...
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Australia’s “low” mortgage growth is still a big problem

ScreenHunter_86 Oct. 01 12.52 By Leith van Onselen Business Spectator's Alan Kohler has continued his schizophrenic take on Australia's housing market, today arguing that concerns about excessive speculative activity in the housing market are not warranted because credit growth is so low: There’s talk of macroprudential policies to limit investment lending, but no one is rushing into this, and for good reason: there isn’t really a problem. There were three booms in property investment during the 1990s, when investor housing credit grew at between 25 and 30 per cent per annum. The current growth rate is anaemic by...
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Is the RBA to blame for housing speculation?

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen Former RBA board member, Professor Warwick McKibbin, has delivered the RBA a serve, blaming the central bank's ultra low interest rate settings for fuelling unprecedented investor housing speculation, and blowing a potential housing bubble. From The Australian: Professor McKibbin said the bank had made the wrong call to cut interest rates so low and was facing the consequences. “A surge in investor borrowing for assets in relatively fixed supply such as housing was inevitable; yet cutting rates was never going to do much to boost business loans or weaken the currency...
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Australia’s empty homes

ScreenHunter_71 Sep. 30 17.30 By Catherine Cashmore, a market analyst, journalist, and policy thinker, with extensive industry experience in all aspects relating to property. Follow Catherine on Twitter or via her Blog. “The home, built in 1857, had been unoccupied for years” said the report of a dilapidated Victorian-era mansion in Sydney’s Balmain East. Situated in an exclusive residential pocket next door to Balmain East ferry wharf, and sporting bayside views of Sydney’s Harbour Bridge, the 457 square metre block of land attracted 200 people to the auction, 18 registrations to bid, and sold $830,000 above the...
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It’s Raine-ing elderly property investors

200236712-001 By David Collyer, cross-posted from Prosper Australia: Angus Raine of RE agents Raine & Horne burst into song about property taxes in a letter on page 55 of the Australian Financial Review today- and what a nice cartoon, Clement! Angus wants Stamp Duty tax breaks for empty nesters – people trapped in inappropriate housing by bad taxes. He wants capital gains concessions for real estate investors over the age of 60, saying, “tax constraints are making it very difficult for them to access the capital tied up in these assets.” The Raine & Horne agents will be walking tall today,...
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Cormann rules-out housing super fix

ScreenHunter_282 Nov. 14 14.15 By Leith van Onselen Finance Minister, Mathias Cormann, has ruled-out allowing first-time home buyers to access their superannuation to pay a house deposit, arguing that such a move would merely inflate house prices further. From The Australian: Senator Cormann said the idea would probably put pressure on house prices at a time when people were concerned about housing affordability... Senator Cormann countered the idea by suggesting it would only increase further. “The purpose of superannuation is to provide an income stream in retirement,” he told ABC News24. “There is a sole...
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Investors still hog wild for mortgages

ScreenHunter_05 Apr. 15 22.08 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of August: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.2% MoM; 1.1% QoQ; 1.1% YoY) and business credit growth (0.0% MoM; 1.2% QoQ; 3.2% YoY) continue to grow at a modest pace in annual terms, whereas housing credit growth (0.6% MoM; 1.7% QoQ; 6.7% YoY) is stronger, but remains at fairly subdued levels relative to its long-run average growth rate; although it is still growing more than twice as...
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RP Data: Home prices up marginally in September

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen RP Data's price results are in for September, with the daily index recording a 0.10% rise over the month at the 5-city level, with values rising in Sydney, Brisbane and Adelaide, but falling in Melbourne and Perth (see next chart). It was the fourth consecutive monthly increase in values, with values also up by 2.83% over the quarter (see next chart). Home values have now increased by 6.31% since the start of the year at the 5-city level and by 9.4% over the past 12 months, driven by strong growth in Sydney and Melbourne (see below charts). however,...
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Kelly O’Dwyer talks foreign investment, negative gearing

ScreenHunter_06 May. 06 09.27 By Leith van Onselen Liberal MP, Kelly O'Dwyer, appeared on ABC Lateline last night to discuss foreign investment in Australian real estate, as well as negative gearing (amongst other things). The full transcript can be viewed here, On foreign investment, O'Dwyer once again slammed the Foreign Investment Review Board's (FIRB) monitoring and enforcement of foreign ownership rules, in particular the requirement that non-residents cannot purchase pre-existing dwellings and the requirement that temporary residents sell their pre-existing homes within three months of departing Australia: KELLY...
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Kohler flip-flops on Australian housing

ScreenHunter_4409 Sep. 30 07.48 By Leith van Onselen Watching Business Spectator's Alan Kohler take contradictory positions on Australian housing over the past two weeks has been a sight to behold. On 17 September, Kohler declared that Australia's high house prices are not a problem and are the result of a well-functioning market: The point is that it’s not entirely clear that expensive housing is a bad thing, although I am talking my book, of course, as a home-owning, empty-nest baby boomer (with frustrated, renting children). It is true that a bubble followed by a crash would be undesirable, to say the least, but is...
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Falling incomes the ultimate barrier for FHBs

ScreenHunter_01 Jan. 27 23.41 By Martin North, cross-posted from the Digital Finance Analytics Blog In the current discussions about macroprudential, stimulated by the RBA comments last week and likely to be stoked further as the RBA appears before the Senate Banking Committee on Thursday, many are claiming that household balance sheets and incomes are supporting the growth in house prices, and so no intervention is needed. The chair of the Banking Committee Sam Dastyari is “concerned about the unanticipated consequences of the Reserve Banks’s view-change on the sustainability of the housing boom and whether it needed to...
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Australian mortgage debt hits all-time high

ScreenHunter_31 Sep. 02 16.36 By Leith van Onselen The RBA released its quarterly household balance sheet statistics on Friday, which revealed that Australian mortgage debt hit the highest level on record in the June quarter when measured against household disposable income. According to the RBA, the ratio of housing debt hit a whopping 137.1% in June, up from 136.1% in March and 5% above the pre-GFC peak of 132.1% (see next chart). Total household debt rose to 151.1% in June, up from 150.2% in March, but remains 1.8% below the 152.9% all-time high reached in September 2006 (see next chart). When compared...
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Property slump hits Melbourne CBD

ScreenHunter_07 Feb. 10 11.46 By Leith van Onselen The Age has a series of feature articles today on the budding oversupply of apartments in and around Melbourne's CBD, which is dampening both prices and rents. According to an analysis of recent sales by the newspaper, many recent buyers of high rise apartments are incurring big losses on resale, as new supply continues to run well ahead of demand: Owners are selling apartments in some Melbourne skyscrapers at substantial losses as the state government approves thousands more units... Central Melbourne will get 10,200 new apartments this year, a similar number next...
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Auction clearances rebound on low volumes

ScreenHunter_19 Mar. 13 13.12 The national auction clearance rate rebounded over the weekend on the back of rises in Sydney, Melbourne and Brisbane. However, volumes were down materially owing to the AFL Grand Final (go Hawks!). According to RP Data, the national weighted average preliminary auction clearance rate was 72.0% over the weekend, which was up 2.8% from the 69.2% preliminary clearance rate reported last weekend. Sydney’s clearance rate rose by 1.6% to 78.5%, whereas Melbourne’s rose to 78.5% (last weekend 69.3%). Brisbane, which typically only has a small number of auctions, experienced an 8.6% jump in its...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 28 September 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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How investors could tank the housing market

ScreenHunter_12 Sep. 23 12.54 By Martin North, cross-posted from the Digital Finance Analytics Blog: I did an interview for the ABC, on the RBA Financial Stability Review. Here is the transcript, courtesy of the ABC. The link to the interview, and my longer interview can be found at the ABC site. By way of context, a quick reminder of current house price trends from the Economist: CHRIS UHLMANN: The Reserve Bank (RBA) has given its strongest warning yet that a dangerous property price bubble in Sydney and Melbourne could destabilise the economy. It’s now ramping up talks with other regulators to introduce...
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Chris Joye: RBA has mis-calculated bubble risks

ScreenHunter_73 Sep. 20 15.11 Chris Joye has delivered another reality check to the RBA, citing a former senior economist at the central bank, Jeremy Lawson, who believes the RBA mis-calculated the surge in investor-driven speculation. From The AFR: “They underestimated how strong the investor pulse would be..." Mr Lawson believes the housing market is between 20 and 30 per cent overvalued and presents the RBA and the Australian Prudential Regulation Authority with a “genuine test”... He said the RBA had had a “change of heart” on the need to apply macro-prudential breaks on credit creation... “We now have...
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“Mad” Adam’s bubble grows bigger

ScreenHunter_4392 Sep. 26 09.00 By Leith van Onselen "Mad" Adam Carr is back, once again slamming the notion that Australian housing is overvalued and opposing the need for the RBA to implement macro-prudential controls in a bid to cool rising house prices: ...property as a long-term investment is simply a no brainer: It isn’t that risky over the medium to long-term and it’s baseless to suggest it is, both historically and with reference to current fundamentals... For a start, property investors account for only 38 per cent of the value of total loans. Much is made of the fact that this highest rate since 2000, but such...
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Aussie John talks his own mortgage book

ScreenHunter_4391 Sep. 26 07.07 By Leith van Onselen Aussie Home Loans founder, John Symonds, has lambasted the idea of the RBA/APRA introducing macro-prudential curbs on high risk mortgage lending, instead arguing that the solution to lower house prices and improved affordability is to increase housing supply. From The SMH: "I think at the moment it [macro-prudential] is premature"... Big house price rises in the past year in Sydney and Melbourne are simply a function of housing supply not keeping up with high demand from fast population growth allied with low interest rates, he said. This had driven investors to buy,...
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Captain Glenn finally endorses macroprudential

ScreenHunter_02 Mar. 26 15.58 By Martin North, cross-posted from the Digital Finance Analytics Blog: In a speech yesterday in Melbourne, the RBA governor, Glenn Stevens said macroprudential tools could prove useful in helping to control the exuberant housing market. That said, he was still skeptical about their effectiveness. He made the point that whilst monetary policy can’t solve every problem (i.e. interest rates alone) and there may be a need to take other steps if “at the margins they are helpful,”he didn’t consider macroprudential tools a simple solution to the problem, referred to in yesterdays Stability...
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RP Data weekly Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 25 September 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.11%. It was the first increase in four weeks (see next chart). Home prices rose across all major capitals (see next chart). Values are down by 0.41% so far in September, with Melbourne and Perth dragging down values nationally (see next chart). Since the start of the year, home values nationally have risen by 5.77%, with all major capitals except Perth rising (see next chart). Over the past 12...
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